Concerns are growing over future supplies of CO2 gas, with a government-brokered deal with the UK’s main supplier CF Fertilisers due to end later this month.
The deal for CF to be paid a pre-agreed price to continue production of CO2 gas at its Billingham plant in Teesside was agreed on 11 October, and followed a temporary government bailout for the US chemical giant after it halted supply in September, amid soaring energy prices.
About 60% of the UK’s industrial CO2 needs are normally met by the business, with the September halt in production raising fears of a CO2 gas crisis that could “dwarf” the one that almost crippled the food sector in 2018.
The gas is a key input in pork and poultry production in particular, and is used to stun animals before slaughter and in shelf-life prolonging modified atmosphere packaging.
But with no indication of whether supply would continue past the end of January and energy prices expected to remain volatile, uncertainty was now growing over whether the food industry could face more supply problems.
One major food business told The Grocer a decision on whether CF would continue production was not expected until the end of the month, adding: “We are preparing for the possibility it will shut down again”.
While the situation was expected to be less critical if CF were to cease production this time round – with other suppliers such as Yara’s plant in Norway affording the gas production sector more capacity – another senior food sector source admitted very little had been done during the past three months to further secure longer-term supplies. This meant the food industry was in danger of “lurching to the next [gas supply] crisis”.
Had the meat and poultry sectors not been “dealing with all the other challenges they have faced recently [such as with labour], they may be more exercised about the current situation”, said British Meat Processors Association CEO Nick Allen. “But it’s frustrating no one can tell us what is happening [to future supply].”
His comments were echoed by a spokesman for Cranswick, who said it was currently “not aware of the confirmed plans of the manufacturers at the end of the supply agreement, but we are watching the situation closely”.
However, a spokesman for 2 Sisters Food Group said its gas supplier was “not so reliant on CF locations”, adding “as long as food is not suddenly de-prioritised [for gas supply] we should be OK”.
The Department for Business, Energy and Industrial Strategy said it was “for the CO2 industry to ensure supplies to UK businesses” and declined to comment further on the supply situation past the end of the month.
CF has been approached for comment on its plans by The Grocer.
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